1. Technical Field
This invention relates to product licensing methods and, more particularly, to a method for securing short-term and long-term licensing agreements on new products while minimizing the financial burden on the licensee during the short-term evaluation period.
2. Prior Art
Each year thousands of new ideas are conceived by individuals and small companies throughout the United States. Often, many ideas never mature into a tangible, physical product due to lack of knowledge in marketing, manufacturing and government certification requirements. For example, some electronic inventions require UL certification from an appropriate government agency while some chemical inventions require prior approval from the Food and Drug Administration and like regulatory agencies. A small entity inventor simply does not have the knowledge of how to acquire such approvals. As a result, good ideas never reach the market and do not contribute to innovation and technological advancement in commerce.
In addition, before a product can be licensed, many criteria must be evaluated for weighing the costs and benefits such as the cost to produce the product, the benefit of employing alternate materials that have superior durability and strength, and costs associated with marketing and distribution of the product. Again, the average small entity inventor simply does not have the time or knowledge to investigate the answers to such matters. Well versed manufacturers and distributors can assist inventors to make and sell their products, but are hesitant to invest unnecessary time and money into evaluating the products and ultimately licensing the products unless there is an incentive to do so. Thus, there is a gap that must be bridged between inventors and manufacturers to promote the evaluation and development of inventions, so that the likelihood of securing a long-term licensing agreement can be improved.
Still further, after satisfying the initial hurdles of receiving agency approvals and proper guidance on manufacturing and marketing techniques, inventors are often faced with additional hurdles of learning how to protect their proprietary rights from stealthy, revenue-minded and unauthorized parties that are willing to create knock-off items and illegally benefit from the fruit of the inventor's labor. To overcome such commercial threats, inventors must seek assistance from qualified legal professionals to protect their intellectual property interests. Such legal assistance can be very expensive and, therefore, inventors often cannot afford the high costs of obtaining intellectual property protection on their inventions. For example, the average cost for obtaining utility patent protection in the United States can reach over $5000.00 for a mechanical invention. Again, the inventor becomes discouraged and lets his/her idea diminish to the public domain.
A number of systems and methods have been developed with the intent of simplifying and expediting the licensing process associated with patents. One prior art example discloses a method for determining what product to develop from a repository of product ideas, obtaining protection for the product and licensing the product to a manufacturer. Such a system, however, does not include a combination of steps for providing a short-term exclusive licensing agreement (ELA) with a good faith retainer. Another prior art example discloses a system for determining a ranked list of candidates for licensing a patent portfolio. Such an example provides a database of potential licensees and compares the list with a database of patents. This example does not show a combination of steps for providing a temporary ELA with a retainer (development bonus).
Accordingly, a need remains for a business method of securing licensing agreements on new products in order to overcome the above-noted shortcomings. The present invention satisfies such a need by providing a product licensing agreement method that is easy to use, provides improved business results for licensors and licensees, and allows for more effective use and investment of monetary funds. Such a method advantageously allows for a simpler and more expedient method of searching for and acquiring exclusive intellectual property licensing agreements and bridging the gap between inventors and manufacturers.